budgeting - practice assessment 1, task 1.4
jazzies123
Registered Posts: 8
Ladies and Gentleman, can anyone help me please!!!
its task 1.4b in practice assessment 1 of budgeting, its regarding how to calculate Variable Production Overheads. The answer is 6600
Thanks in advance
Sara
its task 1.4b in practice assessment 1 of budgeting, its regarding how to calculate Variable Production Overheads. The answer is 6600
Thanks in advance
Sara
0
Comments
-
Hi Sara
1) Variable production OH is based on labour hours (as per the info given).
2) Total labour hours for the year are: 17500 (210000 unit produced x 5 minutes / 60 minutes).
3) Variable production OH rate, therefore, works out to be: £4.40/labour hour (£77000/17500)
4) For the month of April, labour hours required would be: 1500 (18000 units x 5 minutes / 60 minutes).
5) Applying the charge rate as worked out in point (3) above, variable production OH for April would be £6600 (1500 x £4.40).
Trust, this helps
Regards
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